CBN Raises CRR to 75% on Non-TSA Funds, Cuts Interest Rate to 27%

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has announced key adjustments to its monetary framework.

The CBN on Tuesday, introduced a 75 percent Cash Reserve Ratio (CRR) on funds that are not part of the Treasury Single Account (TSA).

In a related move, the MPC reduced the benchmark interest rate by 50 basis points, bringing it down to 27 percent.

The decision, reached after the committee’s latest meeting, reflects the apex bank’s efforts to tighten liquidity around idle funds outside the TSA while also moderating borrowing costs to stimulate economic activity.

Financial experts say the sharp increase in CRR is aimed at curbing excess liquidity in the banking system, ensuring that deposit money banks maintain stricter reserve requirements for non-TSA funds. 

Meanwhile, the rate cut is seen as a balancing act to encourage private sector credit and investment.

The CBN stated that the dual measures are designed to stabilize Nigeria’s financial system while supporting growth amid inflationary pressures and fiscal reforms.